Beware Auckland real estate prices

Member since 28 September 2012

Adam90291Member28 September 2012 23:54:02

Hi fellow immigrants. We moved here 2 years ago from the USA. We saw how horrifying the real estate downturn has been to our fellow Americans. Unfortunately, we're shocked at how oblivious our fellow Kiwis are about the devastating effects of falling house prices. Do your own research and make up your own minds, but if you're coming from abroad to settle here in New Zealand, and you're arriving with equity in your pocket, be VERY cautious about sinking it into another home in New Zealand. Prices are precariously "toppy". There's definitely a lot of the hallmarks of a serious downturn coming. It has already hit Australia. it's hit most spots in New Zealand too, but Auckland seems to be a bubble all its own.

You'd be smart to put your money in a Kiwi bank and earn 4 or 5% interest! Because after the property taxes (which have gone up 30%+ this year) and maintenance costs, it is VERY unlikely that your house will increase as quickly as a term deposit.

Beware also the Kiwi press, which is essentially The New Zealand Herald. We've found it to be terribly biased in favour of their major advertisers--you guessed it, real estate ads. The New Zealand Herald is complicit in a campaign to keep our fellow Kiwis unaware of the property bubble in Auckland. They especially need YOUR immigrant dollars to keep it going. But it's going to pop anyway, and you stand to lose most if not all of the equity you brought with you.

Unfortunately, renting in Auckland is not a piece of cake. It can be tricky. The long-standing culture of home-ownership has seriously short-changed the rights and opportunities for renters. But you already moved across the world--that proves you're adaptable and resilient. I highly recommend remaining adaptable and resilient and not capitulating to buying a new, over-priced home in Auckland just because the sorry rental market is holding a gun to your head.

Rent something a little less ideal for now, and buy something much more ideal in a couple years. You'll be very, VERY glad you did. This bubble is about to pop. Take it from some well-intentioned Americans who have seen it up close. Our friends in the U.S. who never believed their prized properties could go down are now in serious trouble. It looks to be exactly the same dynamic here. Delusional.

As a new immigrant, you're already going to have challenges ahead. Don't make going broke one of them!

jackdlee Member

Member since 30 September 2011

jackdleeMember23 October 2012 08:08:27

Interesting advice u gave here. Is the property bubble is imminent in 'popping' in Auckland specifically soon? I totally agree with you that the property prices in Auckland is over the top. My wife and I made a life changing decision to move from Malaysia to Auckland for good and currently renting a place and have yet to decide on buying a property. Would be nice to meet up with you and hear your thoughts in depth about the property market in Auckland.

Alan Laurente Member

Member since 15 June 2012

Alan LaurenteMember23 October 2012 20:22:37

Thanks for the insight Adam. I have been trying to do the research on moving there from Michigan (USA). I have contemplated living aboard a sailboat in the short term, but I am not sure of the harbor fees and such to pull it off. Still have some research to do. At the moment I am mostly concerned with their unemployment issues and any potential job possibilites. Please keep us informed of things as you see them develop. Great info for prospective expats. Take care.

kiwiinkorea Serial expat

Member since 24 May 2011

kiwiinkoreaSerial expat18 December 2012 11:08:56

385

The bottom line in New Zealand is that demand has always out stripped supply. Yes I agree house prices particularly in Auckland are outrageous but it's been this way forever. One thing is for sure, if you buy right, you are likely to make a fairly good profit after some years. If anybody wants a good contact with someone in Auckland who really knows the Auckland market well, I can put you in touch with some very successful people who are heavily involved in the real estate scene in Auckland and have been for a long time. Whatever their advice is, it will be right on the mark.

jackdlee Member

Member since 30 September 2011

jackdleeMember18 December 2012 23:37:44

kiwiinkorea wrote:
The bottom line in New Zealand is that demand has always out stripped supply. Yes I agree house prices particularly in Auckland are outrageous but it's been this way forever. One thing is for sure, if you buy right, you are likely to make a fairly good profit after some years. If anybody wants a good contact with someone in Auckland who really knows the Auckland market well, I can put you in touch with some very successful people who are heavily involved in the real estate scene in Auckland and have been for a long time. Whatever their advice is, it will be right on the mark.

Would like to get in touch with people of sound knowledge in property market in Auckland.